Can Card My Yard set off any amounts I owe them against the purchase price?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (4) The purchase price, if applicable, will be paid at the closing of the purchase, which will take place not later than ninety (90) days after the determination of the purchase price.
We will have the right to set off againstthe purchase price, and thereby reduce the purchase price by, any and all amounts you or your Owners owe to us.
At the closing, you agree to deliver instruments transferring to us: (i) good and merchantable title to the assets purchased, free and clear of all liens and encumbrances, with all sales and other transfer taxes paid by you; and (ii) all licenses and permits of the Card My Yard business which may be assigned or transferred.
If you cannot deliver clear title to all of the purchased assets, or if there are other unresolved issues, the closing of the sale will be accomplished through an escrow.
You and your Owners further agree to execute general releases, in form satisfactory to us, of any and all claims against us and our subsidiaries, shareholders, officers, directors, employees, agents, successors and assigns.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, Card My Yard has the right to offset any debts a franchisee owes them against the purchase price if they exercise their option to acquire the assets of the franchisee's Card My Yard business. This means that if a franchisee owes Card My Yard money for any reason, such as unpaid royalties or fees, Card My Yard can reduce the amount they pay for the business's assets by the amount owed.
This provision protects Card My Yard by ensuring they recover outstanding debts if they decide to buy back a franchise. For a franchisee, this means that any outstanding financial obligations to Card My Yard will reduce the proceeds they receive from the sale of their business assets. It is important for franchisees to maintain good financial standing with Card My Yard to maximize the value they receive if Card My Yard chooses to exercise its purchase option.
The purchase price for the yard letters and yard signs will be zero ($0), and the purchase price for the other Card My Yard business assets they wish to acquire will be their fair market value. If Card My Yard and the franchisee cannot agree on the fair market value of the business's assets, three independent appraisers will determine the value. Each party will select one appraiser, and those two appraisers will appoint the third appraiser. The franchisee and Card My Yard will each bear the cost of their own appraiser and share equally the fees and expenses of the third appraiser.
The purchase will be paid at the closing of the purchase, which will take place not later than ninety (90) days after the determination of the purchase price. At the closing, the franchisee must deliver instruments transferring good and merchantable title to the assets purchased, free and clear of all liens and encumbrances, with all sales and other transfer taxes paid by the franchisee.